By Brandon Moseley
Congresswoman Terri Sewell (D-AL07) voted on Tuesday to pass critical legislation to prevent a first-ever default on federal debt. The bill, which Senate Democrats passed on October 7, with the assistance of Republican Senate Minority Leader Mitch McConnell (R-Kentucky), will keep the United States under the debt limit through at least December 3rd.
“Defaulting on our credit would cause an unprecedented economic collapse, hurting every American and every Alabamian,” said Sewell. “Contrary to what some would have you believe, suspending the debt limit does not authorize any new spending. This is about paying bills that have piled up under previous administrations including President Trump's. Addressing the debt ceiling is the responsible thing to do, and I was proud to join my Democratic colleagues to protect families from catastrophe and pay our bills.”
President Joe Biden is expected to sign the legislation into law, avoiding a government shutdown. This means that the federal government will be able to continue borrowing money to meet its financial obligations for another two months. This action only addresses previously approved spending, including bipartisan COVID relief, payments to Social Security recipients, payments of veterans’ benefits and paychecks for members of the military, and does not authorize future spending.
Senate Republicans continue to block action on a House-passed bill that eliminates the debt ceiling after the 2022 midterm elections. This would avoid default on the debt, but would also allow Democrats to pass $4.5 trillion in partisan spending plans supported by Democrats alone through the budget reconciliation process.
Republicans oppose the massive growth in the power and scope of federal social programs and warn that adding that much debt that quickly while raising corporate tax rates and rates for upper-income earners could hamper the economy going forward while imposing tenets of the controversial green new deal.
Congressman Gary Palmer (AL-06) said Democrats seem "oblivious" to the national debt crisis.
“Democrats just raised the debt limit while also trying to pass the most expensive piece of legislation in the history of the United States,” Palmer said. “We are already at a point where U.S. debt is at 125 percent of our GDP (Gross Domestic Product). This means that our debt is now 25 percent larger than the entire U.S. economy. The debate over raising the debt limit should have been a pause point to allow Democrats and Republicans to work together to deal with our unsustainable debt. The reckless disregard for our debt crisis has become a national security threat, and it is undermining the security and well-being of the current and future generations. Instead of increasing the debt limit while trying to spend over $5 trillion more, Congress should be working to craft legislation focused on growing our economy, ensuring our energy security, creating jobs, and finding every reasonable way to reduce our debt, which has become a major threat to the future of all Americans.”
The Senate Parliamentarian has ruled that Democrats can pass their spending bills through the budget reconciliation process (which takes just a simple majority); but cannot raise the debt ceiling through the same process, meaning that a debt limit bill requires 60 votes – at least 10 Republicans in the present composition of the Senate if every Democrat supported it.
McConnell has refused to support allowing the Democrats to eliminate the debt ceiling until after the 2022 midterm elections so that Democrats can pass their partisan spending bills.
Presently only 3% of the current debt was accumulated under President Biden, while more than 27% was incurred under President Donald J. Trump.
Economists warn that a default could trigger a global economic collapse and devastate the financial markets. A recent study by Moody’s showed that a debt default would: potentially wipe out $15 trillion in household wealth; lead to the loss of up to six million jobs and double the unemployment rate, surging up to 9%.
Over the last decade, every time the debt limit has needed to be addressed, Congress has acted on a bipartisan basis—including three times under President Trump. Republicans added $7.8 trillion to the federal debt during the Trump administration, including three COVID-19 relief bills and a $2 trillion tax cut. Democrats supported raising the debt ceiling during the Trump administration because the full faith and credit of the United States must never come under threat.
Congresswoman Terri Sewell is in her sixth term representing Alabama’s Seventh Congressional District. Sewell is a member of the House leadership team.
